December 17, 2020, our Executive Chairman, Dato’ Dr. Chua Hock Hoo was invited by Prof. Dr. Aini Aman, Dean, Faculty of Economics and Management, Universiti Kebangsaan Malaysia(UKM) to share the topic on “The Impact of Blockchain on the Accounting Profession”. Dr. Chua is a strong believer of “Knowledge itself is not a Power, but Sharing is.” Thus, he always shared his experience and knowledge to the public.
Blockchain is known as Distributed Ledger Technology (DLT), a digital system that records asset transactions and their details in multiple locations simultaneously. It offers audit firms and accountants an opportunity to streamline their audits and processes since it provides a transparent and immutable record of all data. It helps to ensure that the data is truthful and accurate.
Dato’ Dr. Chua Hock Hoo, Co-founder and Executive Chairman, Cheng & Co Group
However, Blockchain is accessible to all relevant parties by employing a triple-entry bookkeeping model. This means all stakeholders – accountant, auditor, client, regulator – will have an identical copy of the ledger at all times, shared across a peer-to-peer network of nodes (computers) spread across multiple sites.
Recently a lot of people keep mention future do not need accountant. Do you think accountants will lose their jobs because of this? The answer is ‘NO’. The responsibilities of accountants won’t change. The report of “Blockchain Is Not A Threat To Accounting, Its ‘an Opportunity” (Arnold A, 2018). The features & working of accounts & blockchain are similar, ie. keeping track of transaction, assets and liabilities and reconciling accounts. Before they enter the information into the Blockchain, businesses will still need to hire good accountants to interpret and categorize the information. The need for accountants won’t disappear, even though their roles will change, Accountant’s role is not to put in the information, it’s to help business owners to finalize and analyze the account or financial report to make better business decisions, in terms of work efficiency, the emergence of Blockchain on the premise will help to ensuring of work quality, has greatly shortened the working hours and reduced the burden of accountants. While businesses implement of Blockchain, they still need accountants to supervise accounts receivable, prepare invoices, supervise payment contracts and track revenue and capital outflow, so accountants will not lose their jobs due to the emergence of Blockchain. Because of its potential uses, the big four firms have started investigating the possible appreciations of Blockchain in accountancy.
- KPMG had launched the “Digital Ledger Services” program back at 2016 to help financial companies explore the potential of Blockchain.
- Ernst & Young had launched the ‘Blockchain Analyzer’ in 2018 to help their auditors analyze and review Blockchain applications.
- PWC has also announced a Blockchain validation and auditing solution for cryptocurrency.
- Deloitte unveiled a mobile platform ‘Blockchain in a Box’ to help business demo Blockchain solutions.
Dr Chua said applications of Blockchain will only continue to increase. It will change the way accountants operate. Accountants will not need to be engineers with detailed knowledge of how Blockchain works. But they will need to know how to advise on Blockchain adoption and consider the impact of Blockchain on their businesses and clients. Accountants also need to be able to act as the bridge, having informed conversations with both technologies and business stakeholders. Accountants’ skills will need to expand to include an understanding of the principle features and function of Blockchain. Accounting won’t become irrelevant, it will become more efficient.
In order that students can combine what they have learned with their future work, and they can adapt to Blockchain more quickly and better, in January 2020, Cheng & Co became the first accounting firm in Malaysia to sign a Memorandum of Understanding with UKM to set up a Virtual Accountant Centre. Through this platform, we can make jobs available in the cloud for students to work in the centre. Students can experience real cases without leaving campus, analyze them with their professional knowledge, consolidate their knowledge and accumulate relevant work experience. It will help them prepare for the job market as well as giving us access to the next generation of upcoming talents.